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Want entitlement reform? Target politicians

Updated:
07/17/2013 12:06:51 PM EDT

The farm bill, probably more than any other single issue, exemplifies the money-go-around that is destroying American politics.

The public discourse on the farm bill focuses narrowly on the war between conservative Republicans who want to cut food-stamp spending and liberal Democrats who oppose those cuts. Little honest discourse is heard about the bipartisan balancing that tied food output and pricing to supplemental nutrition programs. The traditional system of political trade-offs has broken; and that is where we are out of balance.

The Agricultural Reform, Food and Jobs Act of 2013 - the farm bill - is the vehicle that farm and food special interests use to steal from the rest of us. But note that while agriculture exemplifies the ripoff, it is but one example of a pervasive national problem of government being sold to the privileged. Department of Defense contracting may look to cost us the most, but almost certainly the finance, insurance and real-estate sector has that dishonor. Actually, every sector - from foreign trade to patents to religion - plays the game. We are all on a carnival ride going nowhere.

The money-go-round is a con game that operates under cover of law. The lobbyists set it up. They take the industry's money and donate it to election campaigns or political action committees. The mark, when elected, knows who paid for the election and therefore bought him.

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The industry drafts a subsidy, monopoly or deregulation bill as the means by which the politicians are able to deliver taxpayer money to the industry. The industry then is able to donate even more to their bought politician's next election. The con is now in a self-sustaining spiral of billions of dollars that will continue to go to virtually all our politicians.

At the moment, very disparate farm bills passed the House and Senate. The poor and hungry can't afford lobbyists or buy politicians with their food stamps, so the House bill strips the nutrition program but continues all the subsidies. This is symptomatic of a dangerously broken system. The public good is controlled by private, privileged interests for their benefit at the expense of the people who have no means to buy their way in.

So, let's use the farm bill as an example. First, we are talking about our food supply - it's cost, nutrition and availability, though that is seldom mentioned. There are actually some good reasons for some farm support programs. Beyond that, there are also good reasons for the farm programs to be tied to food stamps. It is normal politics - rural and farm interests get their subsidies and urban poor get food stamps.

Farm programs, like all political acts, were a result of negotiation that balanced the costs and benefits to various political groups. All of government was that way. But not anymore. Now, that balance has been lost as extremists move further and further out trying to leverage their weight. The situation is not unlike the breakdown of negotiation prior to the Civil War. We should be careful of extremists.

The sugar industry with its complex system of subsidies, loan programs and insurance is particularly stupid and costly and should be seriously questioned in public debate. In effect, the Department of Agriculture runs a sugar cartel where bureaucrats determine how much sugar cane and sugar beets each of 5,000 farms will produce. All admit that this doubles or triples the retail price and adds $3.5 billion to the cost of sugar at the supermarket. In addition, every job created by this program costs three jobs in food manufacturing because it forces candy firms like Fannie Mae, Brach's and Hershey to move manufacturing to where sugar is cheaper. Adding the words "jobs act" to the title of the bill has to be somebody's joke.

It is hard to imagine Republicans fighting for such a "socialist" program, and in fact the academics in the Club for Growth, the Competitive Enterprise Institute and Americans for Tax Reform object strongly. The money-go-round is the only reason the program continues to exist.

On the other side, there is the Supplemental Nutritional Assistance Program - food stamps. The conservatives in the House of Representatives stripped the food-stamp program from the bill because, they said, cutting only 20 percent of the $79 billion cost was not enough. The conservatives also want to add work and job-training requirements. But 60 percent of the able-bodied who receive food stamps are already working, and 70 percent of all recipients are children, seniors or disabled.

SNAP is one of our most successful programs to assist the poor. It feeds 46 million people, one in six of all Americans, with an average grant of $133 a month. For an individual to qualify, he must have a monthly net income of $931 or less, which is the poverty threshold. No one is going after crop insurance.

The money-go-round rewards the rich, the lobbyists and the politicians out of our common wealth. Their privilege and subsidies have become entitlements. So I guess it is time for entitlement reform.

A resident of Mt. Gretna, Heise holds a Ph.D. in economics and is professor emeritus of economics at Lebanon Valley College. His column appears every other Thursday. He maintains past columns and can be reached through his blog, paulheise.blogspot.com.

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